The Zacks Analyst Blog Highlights: 3M, Avery Dennison, EI DuPont de Nemours, Johnson & Johnson and Bebe Stores
CHICAGO, Oct. 5, 2012 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include 3M Company (NYSE: MMM), Avery Dennison Corporation (NYSE: AVY), EI DuPont de Nemours & Co. (NYSE: DD), Johnson & Johnson (NYSE: JNJ) and Bebe Stores Inc. (Nasdaq: BEBE).
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Here are highlights from Thursday's Analyst Blog:
3M Restructures, Drops Avery Plan
3M Company (NYSE: MMM), a globally diversified technology company, has reorganized its business groups to better serve its operating market. The company had been operating through six business groups: Consumer and Office, Display and Graphics, Electro and Communications, Healthcare, Industrial and Transportation, Safety, Security and Protection Services Business.
After the restructuring the company will operate through five business groups: Consumer (2011 sales of $4.2 billion), Industrial ($9.6 billion), Health Care ($5.0 billion), Safety & Graphics ($5.5 billion), and Electronics & Energy ($5.7 billion). The last two segments have been newly formed.
The restructured groups are effective immediately. The company will be providing the restated historical figures for the two new segments from first quarter of 2013. Safety & Graphics group will comprise nine operating divisions (3M Touch Systems, Communication Markets, Electrical Markets, Electronic Solutions, Electronics Markets Materials, Infrastructure Protection, Mobile Interactive Solutions, Optical Systems and Renewable Energy). Electronics & Energy will have eight operating divisions (Architectural Markets, Building & Commercial Services, Commercial Graphics, Industrial Mineral Products, Mining, Oil & Gas Solutions, Occupational Health & Environmental Safety, Security Systems and Traffic Safety Systems). Along with this reshuffle, the company also made some changes in its leadership positions.
Through this reorganization the company believes that it will be able to provide enhanced services to its customers globally. 3M, which now operates in as many as 65 countries worldwide, expects to expand its presence in the markets being served by it. Further, the company will also be able to compete better in its operating markets, taking full advantage of the opportunities for innovation and commercialization. The major competitors of 3M are Avery Dennison Corporation (NYSE: AVY), EI DuPont de Nemours & Co. (NYSE: DD) and Johnson & Johnson (NYSE: JNJ).
The company also announced that it has dropped its plan to acquire Avery Dennison's Office and Consumer Products business. The agreement entered into by the two companies has been terminated.
We continue to maintain a Neutral rating on 3M Company for the long term and a Zacks #3 Rank (Hold recommendation) over the next one-to-three months.
Bebe Reports Weak 1Q Comps
Recently,Bebe Stores Inc. (Nasdaq: BEBE) reported weak same store sales and overall retail sales results for the first quarter of fiscal 2013 ended September 29, 2012. The company will announce further details with the first-quarter earnings release on 1st November, which will include wholesale as well as other sales.
The company stated that total retail sales of $105.1 million for the reported quarter declined 9.4% from $116.0 million in the prior-year quarter. Comps declined 8.7% year over year for the quarter compared with an increase of 7.0% in the year-ago period.
The decline in retail sales and comps were primarily due to lower traffic at the company's stores. We believe the company's fusty discounting tactics remained ineffective to lure customers at its stores.
As of September 29, 2012, the company registered a 12.5% growth in average inventory per square foot compared with 1% increase in the year-ago quarter. The year-over-year increase was mainly due to rise in average per unit costs and investments in wear-to-work.
In an effort to fight the situation of falling retail sales, Bebe is focusing on the development of a multi-channel retail format by enhancing its e-commerce capabilities. Moreover, the company believes that its new distribution facility in Benicia, California, has the capability of serving both, its online and offline sales.
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